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India’s Auto Sales in FY18 at Record High

Ind-Ra-New Delhi-30 April 2018: India Ratings and Research (Ind-Ra) has published the March edition of its credit news digest on India’s Auto sector. The report highlights the trends in the sub-segments of auto sector, including passenger vehicles (PV), commercial vehicles (CV) and two-wheelers (2W), with a focus on sales volumes growth, market share movement, change in commodity prices and the recent rating actions.


In FY18, India’s automobile sales volume increased by a record 14% yoy, the highest growth rate achieved since FY11. This was backed by a strong demand in the CV and 2W segments.

During March 2018, domestic industry volumes increased 18.2% y-o-y and 5% m-o-m.

Medium and heavy commercial vehicles’ (MHCV) sales grew 12% y-o-y in FY18, after reporting significantly weak sales in 1QFY18. The blip in 1QFY18 was mainly due to pre-buying witnessed in the previous quarter on account of transition from Bharat Stage (BS)-III to BS-IV. From 2QFY18 onwards, sales rebounded in the MHCV segment, benefiting from road and infrastructure development in the country, streamlining of the logistics post Goods and Services Tax implementation and implementation of overloading bans in the country’s larger states such as Uttar Pradesh, Rajasthan and Madhya Pradesh.


Light Commercial Vehicles’ (LCV) sales also spurred by 25% y-o-y in FY18. Demand in the LCV segment came from the consumer driven sectors, transportation of agricultural produce which benefitted from favourable monsoons, and growth in online retail.

In March 2018, sales volume of MHCV and LCV increased by 16% y-o-y and 31% y-o-y, respectively.

2W sales spiked by 15% y-o-y, with positive contributions from scooters and motorcycles segments. The motorcycle segment which had been facing a slowdown since FY13 witnessed a strong growth of 14% y-o-y in FY18. A pent up demand in the motorcycles segment, supported by favourable monsoons for last two years and new product launches in the segment were the key drivers for the improvement in sales. Scooters segment continued to record robust sales growth of 20% y-o-y. In March 2018, 2W sales were up by 18% y-o-y.


The PV segment recorded a steady growth over FY15-FY18. In FY18, domestic sales volume increased by 8% y-o-y, backed by strong sales of compact utility vehicles. Utility vehicles continued to grow at more than 20% for the second consecutive year. In March 2018, PV sales were up by 6% y-o-y.

Automobile exports from India revived in FY18, with a 16% yoy growth, driven by robust growth under motorcycles and three-wheeler segments, partially offset by weaker sales in PV and CV segments.

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